Workers’ compensation factions maneuver on bill

As chronicled in this space on other occasions, California’s multibillion-dollar system of compensating workers for job-related illnesses and injuries is a political jungle in which the strong prey upon the weak.

There are five major workers’ compensation interest groups – employers, insurers, labor unions, medical care providers and lawyers who represent claimants – and they joust constantly in the Capitol over the rules governing who gets what from whom.

About once a decade, a majority of the five agrees on major changes and then foists their “reform” on the other two.

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The last time it happened was 2012, when employers and unions, backed by insurers, agreed to tighten medical care costs and use the savings to increase cash benefits to disabled workers.

The losers in that round, medical providers and lawyers, have fumed about it ever since, and the contending factions are beginning the intricate political ballet to establish who’s going to do what to whom next time.

The interim between big “reforms” doesn’t preclude some lesser efforts, and one occurred last year when Assemblyman Adam Gray, D-Merced, carried Assembly Bill 1244 to crack down on medical providers who defraud the system.

Fraud is rampant in Southern California with unscrupulous lawyers and doctors conspiring to recruit clients and run up big bills that fall on employers and their insurers.

Last week, the Department of Industrial Relations, using new powers from Gray’s bill, announced that seven Southern California medical providers had been suspended from treating workers’ compensation payments for fraudulent billings.

As AB 1244 was moving through the process last year, Gray inserted and then quickly removed other language that seemingly relieved employers and insurers of responsibility for some small claims for “cumulative trauma” – injuries that accumulate over months or years, rather than stem from one incident.

The origin of the language was somewhat mysterious, as is Assembly Bill 221, a new Gray bill that’s similar in thrust to last year’s abandoned language.

Gray’s office says it’s just another effort to crack down on fraud, but lobbyists who work the issue believe there are other motives.

Companies that represent medical providers in seeking workers’ compensation payments for patients’ bills have labeled it a maneuver by employers and insurers to shed liability.

That’s evidently not true, but another theory is that it’s an indirect slap by workers’ compensation lawyers against labor unions for their 2012 deal with employers. The California Applicants Attorneys Association, however, denies paternity.

Labor killed last year’s language and will probably kill AB 221. Whatever its origin or fate, it indicates that in the next round of “reform,” cumulative trauma may be on the table.

Cumulative trauma claims have been increasing rapidly and employers and insurers see them as fraught with fraud, while unions are leery of any changes that could deny legitimate claims.